Why Amazon won’t launch its own tablet, but will use Apple’s

The era of the Kindle is over, and Amazon knows it. Amazon isn't abandoning …

The Kindle game is up, and Amazon knows it. In 2010, the world plus dog will be hawking an E-Ink-based e-reader, and major distribution and publishing houses like Barnes & Noble, Google, and Hearst will be offering their digital content on everything with a screen. That's why Amazon gave up some royalty money to e-book publishers on Wednesday, and announced a SDK and app store for the Kindle on Thursday.

The former move makes the Kindle Store more attractive to publishers, who will soon have plenty of options for putting their content on e-readers, E-Ink or otherwise. And the latter move will keep the Kindle e-reader fresh and attractive long after Amazon joins Apple at Wednesday's iSlate launch to announce that the Kindle Store is coming to Apple's new tablet, and to every other smartphone and tablet on the market. Forget about Amazon launching its own tablet—this year, the Kindle Store will be everywhere.

The Kindle hardware gets an SDK and a fighting chance

"Amazon announced that it is inviting software developers to build and upload active content that will be available in the Kindle Store later this year," the company said in a press release on Thursday. "The new Kindle Development Kit gives developers access to programming interfaces, tools and documentation to build active content for Kindle."

As examples of "active content," Amazon mentions word games, restaurant guides, and puzzles. EA Mobile, the division of Electronic Arts that does games for smartphones, is jumping on-board, but it's not clear what they have in mind for the platform. ("You're in a maze of twisty passages, all alike"?)

The fact that EA Mobile is involved has led some to speculate that Amazon will announce a non-E-Ink-based, tablet-style device that can accomodate video and will compete with Apple's upcoming iSlate. Specifically, the WSJ report on the announcement includes speculation from a Forrester analyst that Amazon is readying an iSlate competitor.

This is extremely unlikely for two reasons: 1) an Amazon-branded media tablet would be just one of a number of Wi-Fi-only tablets that are launching this year, and 2) Barnes & Noble's e-book store will be on everything with a screen by the end of the year, so Amazon will end up following suit by rolling out the Kindle store to all of the aforementioned tablets, including Apple's iSlate.

But before I elaborate, let's be clear on one thing: the Kindle Developer Kit announcement is quite explicit that Amazon is planning app store for the existing Kindle:

The Kindle Development Kit enables developers to build active content that leverages Kindle's unique combination of seamless and invisible 3G wireless delivery over Amazon Whispernet, high-resolution electronic paper display that looks and reads like real paper, and long battery life of seven days with wireless activated.

So at some point soon, the Kindle will get apps that are designed specifically for the existing, E-Ink-based hardware.

And the Kindle is just the first such E-Ink device to get an app store. There will be others, because the hardware race that's going on in e-reader application processors will ensure that there's plenty of computing horsepower to push the software on these devices quite a bit further.

An Amazon tablet would be a me-too, Wi-Fi-only device

Before talking about why Amazon will launch an iSlate Kindle Store, let's talk about why they won't put out a competing tablet of their own.

When the Kindle launched, a huge part of its success was that you don't have to sign a wireless service contract with it. Whispernet's bandwidth is pre-paid and all-you-can-eat.

This pricing model will continue to work on the current Kindle even after it gets an app store, because the E-Ink display's combination of low resolution and glacial refresh rate ensures that the bandwidth load that any app can put on Whispernet will remain very low. Sprint and Amazon have no worries that Kindle games will suck up Whispernet bandwidth, because the display essentially acts as a giant bandwidth bottleneck. So Whispernet's all-you-can-eat model is safe.

This would not be true of an Amazon-branded tablet. An Amazon media tablet would have to either rely on Wi-Fi, or come with a more traditional 3G service bundle that would severely limit its appeal. And given that it would be a media device, the price of 3G bandwidth for it would be high.

So, an Amazon tablet would be yet another large-screen, Wi-Fi-based, portable media player, of the type that everyone and their uncle is bringing to market this year. And unless Amazon has a skunkworks tablet OS project that can compete with whatever Apple will put on the iSlate, the company will be stuck using a Linux or Windows flavor, just like all of the other tablet vendors (e.g., HP, Dell, and Lenovo on Windows 7, or any number of Chinese OEMs on Android) who have established hardware brands and way more experience in tweaking existing software to make an integrated device.

The only way to differentiate such an otherwise generic tablet would be for Amazon to make it the exclusive platform for the Kindle Store. The reason that such a thing won't happen brings me to my next point.

B&N and Google Books are on everything, so Amazon will follow

At CES, every random E-Ink reader company had a big sign up advertising that Barnes & Noble and Google Books are available on their platform. Hearst is doing a similar thing with its Skiff project, where the Skiff-branded reader will be but one way to access Skiff content. These media powerhouses will be joined by an army of small, "social publishing" startups like Scribd, FastPencil, Copia, etc., all of whom want their content store to be on as many platforms as possible.

As the company's somewhat rudimentary iPhone Kindle app shows, Amazon will eventually put its Kindle store on everything with a screen. Either that, or Amazon will be left hawking a me-too tablet to a customer base that is migrating to Barnes & Noble and other distributors and publishers. Given that Amazon just bought e-book reader software maker Lexcycle, it's much more likely that the company plans to put the coders to work on bringing the Kindle Store to many different smartphones and tablets that it is that they'll launch their own tablet.

The end result is that this Kindle Developer Kit announcement is way to keep the Kindle hardware fresh and relevant while Amazon pursues opportunities in the media tablet market that will take off this year.

The only way that Amazon doesn't end up on iSlate is if Apple locks them out so that it can have the content market on the device all to itself. That's within the realm of possibility, but Amazon will still put the Kindle Store on competing Windows 7 and Linux tablets, better enabling the latter to compete against Apple.

Ultimately, the Kindle has done its job for Amazon, so it's time to move on. E-Ink is no longer the novelty it once was, and publishers are looking to reach as many devices with their content as possible. Amazon's recent decision to give up more Kindle revenue to publishers is a recognition of the fact that its vise grip on them is now broken. In 2010, publishers have alternatives, and Amazon's Kindle platform, as huge and important as it was, is no longer calling the shots.

67 Reader Comments

You may well be right about Amazon but E-ink is no novelty until something as easy to read comes along with as long a battery life. There is a reason the flood of new e-readers are using E-ink. The Kindle SDK is kind of silly precisely because E-ink is good for a narrow niche.

Seems to me there is room in the market for Amazon, as the most recognized non-vaporware e-reader, to issue at least one more Kindle revision before Xmas this year.

As much of an Apple iPhone fan as I am, don't you think it is WAY too early to forecast Amazon rolling over on the hardware against an unannounced Apple device? I do.

Ok. First of all the Kindle, particularly the DX is a fine device. Having such a thin slate that allows me to carry around my entire technical library in addition to general reading material has had a very positive impact on my life.

Second, I will be surprised if Apple accepts Amazon e-books on their tablet. Everyone is balkanizing, creating their own little e-book fiefdoms of incompatible standards. Apple is doing the same. Doesn't Apple want me buying from iTunes and NOT Amazon? It looks more and more to be like I'm going to wind up with a Kindle and an Apple tablet.

Amazon released a Kindle app for the iPhone and Windows but curiously nothing for the Mac yet. You have to wonder why. The iPhone and the Mac share OS X DNA so the move from iPhone to Mac shouldn't be that difficult, yet there is still no Mac version of the Kindle reader. This new tablet also will likely share the same DNA so you'd think that Amazon could just release a Kindle reader for it. Why would they? They just barely started shipping the Kindle DX in quantity and Apple probably doesn't want them competing with iTunes.

Same reason there is no FLASH for the iPhone. Competing development standard = no profit sharing for Apple.

The Amazon may no longer be calling the shots, but what if they just opened the Kindle up to the different standards making it the most compatible reader out there?

This whole e-book thing is a mess. I've never been so confused about which direction things might take.

Amazon's recent decision to give up more Kindle revenue to publishers is a recognition of the fact that its vise grip on them is now broken.

Uhhh....Amazon's move looks to me to be clearly aimed at authors who've retained digital rights in an attempt to bypass publishers completely. No major publisher is going to get excited over receiving $7 per sale (70% of $9.99) for a new release when current hardback sales bring them $12.50 (50% of a $25 MSRP which is discounted by the retailer).

Amazon's in the middle of a war with the big publishing houses, and their new DTP royalty rates are an attempt to skim off the back catalogue which hasn't been tied down. It's certainly a good deal for established authors who have digital rights to their old titles.

The Kindle is still pretty strong with an established ecosystem, and Amazon is continuing to strong-arm publishers over pricing. I'm sure there are lots of publishers who'd love to dump the Kindle with its $9.99 pricepoint, but they need to see a competitor build an ecosystem and a device base to match it. B&N is certainly a possibility for this, if only they hadn't cut corners on the hardware in their nook. The Skiff looks nice, but with its 11.5" screen it's not going to be priced for the mass market...

[The Skiff certainly represents a possible threat though, it's no accident that skiff.com has 'Publisher Friendly' in big letters on its home page. But they need to come out with something under $200 to be a real player in the market.]

Originally posted by Penforhire:As much of an Apple iPhone fan as I am, don't you think it is WAY too early to forecast Amazon rolling over on the hardware against an unannounced Apple device? I do.

It's not so much that they will roll over, but that they will not get into the emerging tablet market. I too expect to see a new Kindle, but I don't think it will be anything like the tablets or what Apple will be bringing.

quote:

Originally posted by resistor.one:Second, I will be surprised if Apple accepts Amazon e-books on their tablet. Everyone is balkanizing, creating their own little e-book fiefdoms of incompatible standards.

Here's why I don't think Apple can keep them out: they already allow the Kindle on the iPhone/iPod Touch. It would be anticompetitive to say all of the sudden that it can't run on the tablet. I'd expect the FTC to freak out if they tried that.

quote:

Amazon released a Kindle app for the iPhone and Windows but curiously nothing for the Mac yet. You have to wonder why.

Originally posted by Karoch Sharon:Your analysis hinges on a pretty ubelievable premise: Apple will put out a device that is price competitive with the Kindle.

Sure, but that wasn't what they did with the iPod, either. They came in with a player price at $400, and plenty of people scoffed. Guess who dominates now? The company excels at making products that people will pay more for.

Are there cheap music players today? You bet. But they aren't innovative, and have razor thin profit margins. The money and innovation happens on the high end. The same will be true for tablets/readers.

Originally posted by resistor.one:iPhone = OS X... so it's not that small a market share.

I would think that if they've already put the basic work into the iPhone/iPod touch version... it's a very short leap to the OS X version. There's some other reason.

Have you used Reader for PC? It's a much more advanced app than what's on the iPhone. I don't think comparing the two makes a lot of sense. Amazon has said that a Mac reader is coming. Unless they are lying, they are looking at having a more full-features client for the desktop, but the OS is definitely a lower priority.

Funny how long just plain old books are around and technology is still trying to make up their minds as to what file to use. Call me a luddite if you want - [Although, I actually deposit checks from my iPhone ]- but nothing beats the smell of ink and the accumulative dust that you get for free.

The problem with technology is that you are limited by the people who develop it and the capitalists who profit by it...... GQ/2010

Yet another Kindle pundit who's never used a Kindle (at least for reading more than one book).

The SDK is mainly intended to develop things like organizational tools (folders), antialiasing controls and font controls, justification and leading controls, and lots of little things related to reading books that Kindle owners have clammered for. Amazon doesn't want to and Amazon's Kindle customers don't want it to turn the Kindle into a general purpose tablet. The market is for people who read books, textual books, and a lot of them, not for people who read blogs and once a year tackle Infinite Jest or the like.

I may get a tablet, but I won't haul it around with me 24/7 like I do my Kindle 2. Many of us use the iPod touch or the iPhone for reading bits or our books, synced to the Kindle, because it's tiny, but we don't want a huge thing like the tablet will be.

At CES, every random E-Ink reader company had a big sign up advertising that Barnes & Noble and Google Books are available on their platform

This is simply wrong (on the BN portion, not the Google portion, as you are forgetting the closed DRM BN employes). B&N eBooks only work with B&N clients. Google support is nice, but public domain books aren't setting the world on fire. Furthermore, I have yet to see one CES announcement for an eBook reader that mentions BN store support.

What everyone seems to forget is that Amazon is pushing their format as well as the device, hence you see iPhone and PC clients. Amazon wants to make it as easy as possible for everyone to use .mobi files. It's a good bet that the Apple tablet will run iPhone apps, and it's even better odds that the Kindle format will be updated for the tablet.

This new tablet also will likely share the same DNA so you'd think that Amazon could just release a Kindle reader for it. Why would they? They just barely started shipping the Kindle DX in quantity and Apple probably doesn't want them competing with iTunes.

Because eReaders and Tablets don't compete. Not for the same functionality.

Whatever Apple unveils will not be competitive for serious reading with any dedicated eReader. Until the "staring into a lightbulb" problem with all active displays is resolved, there will always be a need for a specialized eReader device.

Tablets will only be for light reading.

Also, Amazon makes their money from books, not eReaders (though they probably make some from that too). So getting the Kindle store on as many devices as possible is just fine for them.

quote:

I would think that if they've already put the basic work into the iPhone/iPod touch version... it's a very short leap to the OS X version.

No, it's not. Developing for a desktop is nothing like developing for a small-screen touch-based device. Two different worlds with two different GUI styles.

quote:

Funny how long just plain old books are around and technology is still trying to make up their minds as to what file to use.

Yeah, it is funny. Funny like how "technology" has only been in place for maybe 10 years, compared to the thousands writing has been around.

In the early days, paper wasn't use everywhere. Some people used walls. Some used papyrus or parchment. Nowadays, paper is standard.

The Kindle isn't going anywhere. It is simply the best e-book ecosystem out there. They have an integrated store with a very fine device, it is the iPod of books. E-ink is the way to read e-books. It uses less power and is much easier on the eyes. People claiming tablets are going to supplant e-books are not avid books readers and haven't owned an e-book nor get e-books.

People who read books don't want video/audio/color, they want limited distractions to focus on the book. The kindle is optimized for book reading and many have indicated they read faster or more with the kindle. The kindle is a book device not a media device.

The iSlate is a media device. It is for audio/video/reading but not prolonged book reading. Yes you will be able to read books on it and Amazon would love to have its app on every tablet to sell e-books. It will never be the preferred device for avid readers.

Any idea of the of demographics of the eBook market. The largest demographic of the eBook market is 50+ year olds, primarily female. Any idea on the interest this demographic has in tablet computers. Zilch.

Um, what is up with the tech world and their palpable hate for E-book readers? No Tablets won't come down in price to that of a dedicated ebook reader. The slippery slope argument that 'the ipod was expensive, but look at the cheap mp3 players out there now' is a complete fallacy. First MP3 player hardware was never that advanced. Tablets require a full set of expensive components, not just some miniscule processor, mini hard drive, 3 inch lcd, and a sound output device. I mean maybe in 8 years the components used in tablets today will be cheap, but thanks to the unrelenting drive for new stuff, it will be outdated and thus 'useless' so only the expensive stuff will be able to be purchased.

And no, it will not be anywhere near optimal to read on a LCD. What everyone has against E ink i will never understand. Its a perfect type of technology for its use, but for some reason people no one on the internet can deal with having single use devices. Is carrying a kindle really an inconvenience for anyone? If your lugging around a laptop or laptop sized tablet, chances are you have a reason for it (say work, or videos) and that serious reading time won't overlap with its use.

There seems to be way too much of a fetish for the next 'cutting edge' thing on the internet, and it's harmful to think that perfectly usable pieces of tech should die just because it isn't new and sexy. It's harmful to to the economics of the situation and to the people that are best served by what they have now.

"Everyone is balkanizing, creating their own little e-book fiefdoms of incompatible standards."

No, they are not. ePub with Adobe's DE is very much the standard, and it's supported on all but a few devices - very old ones, a few Chinese-market-only devices and...the Kindles*. Yes, B&N are introducing a "new" type of ePub DRM, but it's already integrated into ADE and will shortly be available to every ADE-using device maker.

(*Not that they don't have ADE support, but that's limited to handling PDF's and not ePub's)

If we define tablet as a multifunction computing device in a thin, A4, keyboard-less formfactor, usually with wireless.

As a Kindle owner for more than a year, it seems massively and stunningly obvious to me that a Kindle is not a tablet, never ever had ambitions to be a tablet, and cannot possibly be mistaken for a tablet at any distance shorter than two paces. Nor is Amazon an operating systems company. Yes they have S3 and EC2, but these are not operating systems.

Kindle more or less shares formfactor and wireless with the tablet phenomenon, but little else. It's currently a dedicated, single-application device, supremely well suited for reading, but little else. At this time, that's a strength not a weakness. It still remains to be seen whether a true tablet can grow outside its current niche in healthcare and other vertical markets. I hope that tablets bust out of that niche, but until they do, and include a display which is at least as energy conservative and easy on the eyes, they will be little threat to Kindle and Kindle-like devices.

I hope that day comes. Tablets are very attractive to me. I have owned two tablet-ish devices, and they both came up wanting in real everyday use. Until the problems of finger/pen input and battery consumption are truly solved, tablets are a great idea that doesn't quite work. Meanwhile, the more single-function Kindle is a great idea that does work, brilliantly.

Originally posted by Caesar:Sure, but that wasn't what they did with the iPod, either. They came in with a player price at $400, and plenty of people scoffed. Guess who dominates now? The company excels at making products that people will pay more for.

Are there cheap music players today? You bet. But they aren't innovative, and have razor thin profit margins. The money and innovation happens on the high end. The same will be true for tablets/readers.

Innovation in music players? Surely you aren't talking about Apple. This is what I don't understand. I get that Apple packages things, sells platforms, I get that they market well, I get they put money into build quality most others don't. They don't innovate. Stop telling yourself that. The MP3 existed before Apple - so did touch screens, so did multitouch, so did pinch zoom. Apple sells a package, not innovation. They charge a massive premium for it. Then the market replicates the package, and moves past them. It always has, it always will. It's already happening, with their failure to push the iPhone platform forward. HTC is pulling even, so are a half dozen other companies. The platform that embraces the most users will win, not the one that makes the highest profit margin.

Apple is the P4EE of the CE world. Tap into the people who are buying not to fill a technical need, but an emotional one.

iPod succeeded because there was no mass-market platform; then lock-in through the parisitic relationship with iTunes forced the organic growth (like IE market share). There aren't any competitors in the marketplace because there isn't a Netscape to stand up to Apple today. How many users even know they have a choice? An MP3 player IS an iPod.

Apple operats like Microsoft in the 90's, except nowehere near as successful because their investors prefer higher margins and they don't have the engineering horsepower to keep up with the market at large.

I don't think that the 'iTablet' is the be-all and end-all device - Apple will have fierce competition in this space. Microsoft is firing on all cylinders again and a lot of my non-techie friends are asking about (and very interested in) Android.

Will Apple's shareholders allow Apple to include anything other than iTunes on their device? I think not because it's iTunes that has made Apple the extremely profitable company it is now.

Will consumers be willing to pay the Apple Tax on such a device? The Slate PC should be well under $500 when it is introduced and Android tablets will be even cheaper. It may be hard to convince the 'average Joe' to spend (the rumoured) $999 on the iTablet when they can get an Android tablet for $199. Lets face it, $199 - $299 can be an impulse buy (look at netbooks) where the iTablet will be a huge decision for most.

Amazon on Android could be a real winner, especially for the masses who are willing to take a chance on a 'new' and sexy technology.

The first comment is spot-on. The last thing I need after staring at an LCD monitor all day at work is to do my reading on one at home. I've owned a Kindle2 since it came out, and the e-Ink screen is a pleasure. And the two weeks of battery life I get out of it is wonderful too. It may be true that e-Ink is no longer a "novelty," but it's the best way to do any serious reading on an electronic device.

Amazon sells the Kindle essentially at cost. They want you to buy books. They only created the Kindle to make the market for digital books. They will breathe a huge sigh of relief when someone else handles hardware development and support and they can focus on selling high margin digital goods.

Might as well talk about how tough it would be for Gillette if Schick started selling razor handles that require Mach III blades.

ARS, for all that is good and holy, please either lay off the business analysis pieces or get a real business analyst to write them. Your technical and scientific content is second to none. These types of articles, though, kind of hurt.

Amazon sells the Kindle essentially at cost. They want you to buy books. They only created the Kindle to make the market for digital books. They will breathe a huge sigh of relief when someone else handles hardware development and support and they can focus on selling high margin digital goods.

Might as well talk about how tough it would be for Gillette if Schick started selling razor handles that require Mach III blades.

ARS, for all that is good and holy, please either lay off the business analysis pieces or get a real business analyst to write them. Your technical and scientific content is second to none. These types of articles, though, kind of hurt.

I think ARS is talking in long run. no matter what, it's impossible to fight with apple in cost whether the development cost or hardware cost.

Yes, this is right, there may be hope. Hope, that is, for those of us who want to see access to all media from multiple platforms and no lockins. Its not by any means a sure thing, because the main players are all committed to lockins and DRM and proprietary formats, but at least, along with this, there is the usual tension between content and access, and this may drive things in the direction of openness despite the wishes of the participants. The article is right about this.

The content or software guys always want their stuff as widely available as possible on any platform. The platform guys always want their customers to be able to use the platform to access any content they like. Company strategists are always moving in the direction of lockin and leverage - they always are looking for the killer app they can restrict to their platform, to make people buy the platform. You saw this work out in two different ways in the UK, within the Murdoch group. Sky got an exclusive on some sport, then used this to oblige people to buy the Sky satellite service. That worked. But they tried to do the same thing with UKOnline, as an online service, and who has ever heard of that?

There is one possible outcome of the e-book developments which anyone who values intellectual freedom and power for the individual to access content, over power for corporate alliances to restrict it, must hope happens. That would be if as suggested in the article, there is a healthy and fragmented competitive device market, and the drive to reach this creates an incentive for content publishers to make their content available in device agnostic formats.

But it is also possible that companies like Apple and Amazon see their interests as being to lock content to one particular device. We can be sure that Apple will do everything in its power to sign up exclusive deals and lock content to their device. Basically, we need to think Sky. Apple is always looking for the Premier League rights purchase, that will force people who want to watch football to buy their dishes. What it desperately wants to avoid is a situation in which its devices are just one among many, with designer attributes but in no way differentiated by the content they can access. Amazon and other publishers will only be forced to refuse such exclusives if there is a large part of the market that has other platforms.

But Amazon too is no enemy of lockin in principle. Its a pragmatic matter for it. It has already tried it with Kindle. So if it decides that the Apple device is powerful enough, and if Apple is demanding enough, it will go for it, and we will all lose. These guys are no different from each other or from MS, they are not interested in the social effects, they are interested in the financial benefits of lockin. And in Apple's case there is a diseased obsession with control of its buyers, of course.

So we come down to it again: what we need, if we value a liberal society, is for Apple to be kept in its niche as long as it retains its current lockin business model. We need the Kindle model to wither. We need a lot of competing hardware devices, and open standards for media to become the norm.

The suggestion that Amazon would even consider trying to compete with an Apple tablet is patently absurd. Amazon is a retailer, not an electronics company. They launched the Kindle to jump-start the ebook business, and in this they have succeeded. But the future of mobile digital devices unquestionably belongs to Apple.

Active content will be available to customers in the Kindle Store later this year. Your active content can be priced three ways:

Free — Active content applications that are smaller than 1MB and use less than 100 KB/user/month of wireless data may be offered at no charge to customers. Amazon will pay the wireless costs associated with delivery and maintenance.

One-time Purchase — Customers will be charged once when purchasing active content. Content must have nominal (less than 100 KB/user/month) ongoing wireless usage.

Monthly Subscription — Customers will be charged once per month for active content.

So for free and one-time-charge apps, there’s a monthly limit of 100 kilobytes of bandwidth. Go over that and the developer has to start paying the bill. As point of reference for just how small 100 KB is, the Daring Fireball RSS feed at this moment is 115 KB. With gzip compression, it shrinks to 36 KB. So even with compression, a free or one-time-charge Kindle app could only download the DF RSS feed twice per month without going over.